RESOLUTION OF BOARD OF NATIONAL BANK OF THE KYRGYZ REPUBLIC

of January 30, 2019 No. 2019-P-33/4-2-(NPA)

About modification and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic

According to articles 20 and 68   of the Law of the Kyrgyz Republic "About National Bank of the Kyrgyz Republic, banks and banking activity" the Board of National Bank of the Kyrgyz Republic decides:

1. Make changes and additions to the following resolutions of Board of National Bank of the Kyrgyz Republic (are applied):

- "About" regulations of activities of microfinance companies in the territory of the Kyrgyz Republic" of February 19, 2003 No. 4/2";

- "About approval  of the Provision "About the Periodic Regulating Report of the Microcredit Company / Mikrocreditnogo Agencies" and  the Provision "About the Periodic Regulating Report of Microfinance Company" of May 27, 2009 No. 25/3";

- "About approval  of the Provision "About the Minimum Requirements on Credit Risk Management in the Microfinancial Organizations Which Are Not Attracting Deposits (Deposits)" of September 25, 2013 No. 35/14";

- "About  the Provision "About the Periodic Regulating Report of Credit Union" of January 16, 2008 No. 3/3";

- "About approval  of the Provision "About the Minimum Requirements on Credit Risk Management in Credit Unions" of December 23, 2009 No. 50/7";

- "About approval  of the Provision "About the Minimum Requirements to Procedure for Provision of Financial Services and Consideration of Addresses of Consumers" of June 24, 2015 No. 35/10".

2. To legal management:

- publish this resolution on the official website of National Bank of the Kyrgyz Republic;

- after official publication to send this resolution to the Ministry of Justice of the Kyrgyz Republic for inclusion in the State register of regulatory legal acts of the Kyrgyz Republic.

3. This resolution becomes effective after fifteen days from the date of official publication.

4. To management of supervision of non-bank financial credit institutions to bring this resolution to the attention of microfinance companies, microcredit companies, mikrocreditny agencies, credit unions, OYuL "Association of the Microfinancial Organizations", JSC Finance Company of Credit Unions, OYuL "National Association of Credit Unions and Cooperatives", regional managements and representative office of National Bank of the Kyrgyz Republic in Batken Province.

5. To impose control of execution of this resolution on the board member of the National Bank supervising Management of supervision of non-bank financial credit institutions.

Appendix

to the Resolution of Board of National Bank of the Kyrgyz Republic of January 30, 2019 No. 2019-P-33/4-2-(NPA)

Changes and amendments in some regulatory legal acts of National Bank of the Kyrgyz Republic

1. Bring in the resolution of Board of National Bank of the Kyrgyz Republic "On" regulations of activities of microfinance companies in the territory of the Kyrgyz Republic" of February 19, 2003 No. 4/2 the following changes and amendments:

in the name and in all text of the resolution to replace the word of "companies" with the word of "organizations";

in  Regulations of activities of the microfinancial organizations in the territory of the Kyrgyz Republic approved by the above-stated resolution:

1) Item 1.1. state in the following edition:

"1.1. These rules regulate activities of the microfinancial organizations licensed and regulated by National Bank of the Kyrgyz Republic.";

2) in the subitem 4 of Item 2.1.1. to replace the word of "employee" with the word of "worker";

3) Item 2.3.2. state in the following edition:

"2.3.2. The standard rate of the minimum size of equity for IFC, deposits which are not performing acceptance.

1) Value of the standard rate of the minimum size of equity need to be supported at the level of at least 100% of the minimum size of the authorized capital.

2) the Norm of the minimum size of equity is determined on formula:

SK / UK * 100%, where:

SK - equity of IFC for date of assessment (according to Item 2.3.1 of these rules);

UK - the minimum authorized capital established for IFC, deposits which are not performing acceptance according to Item 2.2.2. these rules.";

Item 2.4-1 to state 4) in the following edition:

"2.4-1. IFC, not performing acceptance of the deposits having the right to borrow means from legal entities and physical persons - founders (shareholders) of IFC and legal entities.

The interest rate for the means borrowed from founders (shareholders) shall not exceed discount rate of National Bank more than on 5 percent points.";

5) Items 2.4-2. and 2.4-3. recognize invalid;

Item 2.5.4 to state 6) in the following edition:

"2.5.4. In case of detection of the facts of non-compliance with IFC of requirements of National Bank imposed to their activities, failure to provide data by them, and also untimely provision or provision of unreliable information, the National Bank has the right to apply to them corrective actions according to the laws "About National Bank of the Kyrgyz Republic, Banks and Banking Activity", "About the Microfinancial Organizations in the Kyrgyz Republic" and regulatory legal acts of National Bank.";

7) Rules to add with Item 2.7. following content:

"2.7. If the IFC has obligations to the third parties, and also in case of availability of one of the following threats of stability of activities of IFC, the National Bank can limit dividend payout of IFC if:

It will lead 1) to violation of the economic standard rates established by National Bank;

2) the minimum size of the authorized capital and/or the minimum size of own (regulating) capital established by National Bank is not provided;

3) in the presence of losses of last years, and also in case of failure to meet requirements of regulatory legal acts of National Bank.

Note: The obligation to the third parties is understood as obligations of IFC to legal entities and physical persons, untied with IFC, the money raised from which was allocated for the main activities.";

To state the paragraph of the 9th Item 4.2 in the following edition:

"-the maximum total debt of one employee of IFC, on the loans granted by the company;";

9) Item 5.2.1. state in the following edition:

"5.2.1. Value of the standard rate of the minimum equity M1 needs to be maintained at the level of at least 100% of the minimum size of the authorized capital.";

Item 5.7.2 to state 10) in the following edition:

"5.7.2. The total debt of one employee of IFC who by IFC is granted the loans shall not exceed 5% of the size of equity of IFC and is determined by formula:

 

SZS - total debt of one employee of IFC who by IFC is granted the loans for date of assessment;

SK - equity of IFC for date of assessment.

The IFC has no right to credit (including issue of financing according to the Islamic principles of banking and financing) the affiliated or tied with IFC faces if the total amount of all credits and their substitutes provided to all to the affiliated and/or tied with IFC faces exceeds 60% of equity of IFC.

Transactions on loan granting to officials and employees of IFC can be performed only on condition of observance of the requirements specified in the Instruction "About requirements to transactions of the microfinance companies attracting deposits, with the affiliated and tied with microfinance company faces", approved by the resolution of Board of National Bank.";

11) Item 5.10. state in the following edition:

"5.10. IFC, the performing transactions on acceptance of the deposits having the right to borrow means from legal entities and physical persons - founders (shareholders) of IFC and legal entities.

The interest rate for the means borrowed from founders (shareholders) shall not exceed discount rate of National Bank more than on 5 percent points.";

12) Items 5.10.1., 5.10.2., 5.11., 5.11.1., 5.11.2. recognize invalid;

13) Rules to add with Item 6.8. following content:

"6.8. If the IFC has obligations to the third parties, and also in case of availability of one of the following threats of stability of activities of IFC, the National Bank can limit dividend payout of IFC if:

It will lead 1) to violation of the economic standard rates established by National Bank;

2) the minimum size of the authorized capital and/or the minimum size of own (regulating) capital established by National Bank is not provided;

3) in the presence of losses of last years, and also in case of failure to meet requirements of regulatory legal acts of National Bank.

Note: The obligation to the third parties is understood as obligations of IFC to legal entities and physical persons, untied with IFC, the money raised from which was allocated for the main activities.";

14) in the subitem 5 of Item 7.4. to replace the word of "employee" with the word of "worker";

Item 7.5.1 to state 15) in the following edition:

"7.5.1. MKK, including MKK which is engaged in wholesale crediting has the right to borrow means from legal entities and physical persons - founders (shareholders) of MKK and legal entities.

The interest rate for the means borrowed from founders (shareholders) shall not exceed discount rate of National Bank more than on 5 percent points.";

16) Rules to add with Item 7.7.1. following content:

"7.7.1. Standard rate of the minimum size of equity of MKK.

1) Value of the standard rate of the minimum size of equity need to be supported at the level of at least 100% of the minimum size of the authorized capital.

2) the Norm of the minimum size of equity of MKK is determined on formula:

SK / UK * 100%, where:

SK - MKK equity for date of assessment according to Item 7.7. these rules;

UK - the minimum authorized capital established for MKK.";

17) in the subitem 3 of Item 7.8.2. to replace the word of "employee" with the word of "worker";

18) in Item 7.9 the fourth offer to state in the following edition:

"Execution of agreements in foreign language is allowed only in the presence of transfer into the state or official language.";

19) Rules to add with Item 7.10. following content:

"7.10. If MKK has obligations to the third parties, and also in case of availability of one of the following threats of stability of activities of MKK, the National Bank can limit payment of dividends/profit distribution of MKK if:

It will lead 1) to violation of the economic standard rates established by National Bank;

2) the minimum size of the authorized capital and/or the minimum size of own (regulating) capital established by National Bank is not provided;

3) in the presence of losses of last years, and also in case of failure to meet requirements of regulatory legal acts of National Bank.

Note: The obligation to the third parties is understood as obligations of MKK to legal entities and physical persons, untied with MKK, the money raised from which was allocated for the main activities.".

2. Bring in the resolution of Board of National Bank of the Kyrgyz Republic "About approval  of the Provision "About the Periodic Regulating Report of the Microcredit Company / Mikrocreditnogo Agencies" and  the Provision "About the Periodic Regulating Report of Microfinance Company" of May 27, 2009 No. 25/3" the following changes and amendments:

1) in  the Provision "About the Periodic Regulating Report of the Microcredit Company / Mikrocreditnogo Agencies" approved by the above-stated resolution:

- in Item 3.5:

in paragraph one to replace figure "6" with figure "7";

add Item with the paragraph the twenty second the following content:

"The Section - 7. Data on observance of economic standard rates of MKK.";

- in Appendix 1 to the Provision:

- in the table "Structure of the Periodic Regulating Report of the Microcredit Company / Mikrocreditnogo Agencies":

- 2, 3 and 4 to state line in the following edition:

"

2		Information about board members, Boards, main founders (shareholders) and members of Sharia Council of MKK/MKA	Annual	till the February 1 following after accounting year	It is applied to Sections
			Quarter	in case of changes within quarter
3		Information on certain officials	Annual	till the February 1 following after accounting year	It is applied to Sections
			Quarter	in case of changes within quarter
4		Basic information on MKK/MKA, data on branches/representations / structural divisions (offices), the subsidiary and affiliated companies, the operating committees	Annual	till the February 1 following after accounting year	It is applied to Sections
			Quarter	in case of changes within quarter

";

- in Appendix 2 to the Provision:

- state the Section "Information about Board Members, Boards, Main Founders (Shareholders) and Members of Sharia Council of MKK/MKA" in the following edition:

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